Raising That Bar: Corporate Governance
Britain is ending a turbulent and frustrating year around its referendum decision to exit the European Union on a good note when it comes to corporate governance, in which it leads the world.
This is the new mantra, aimed at British business and being chanted at it from all directions: ‘Action, Not Words’ (as noted in the last Governance Watch) when it comes to gender progression, ethnic representation and inclusion.
As we approach the end of a summer of discontent in the UK, business confidence is at its lowest in 2018, according to a survey by the Institute of Directors (IOD). The risks of a no-deal Brexit range from the impact on the NHS and the entire pharmaceutical industry to implications for more than €100 bn of European bank debt issued under English law. A ‘no-deal’ impact paper on financial services is among those listed to be published on Thursday.
The accuracy of the numbers in company reports lies at the heart of the corporate governance of any business. Institutional investors and shareholders burnt by unexpected company revelations will have welcomed the news that the UK government has just launched an independent review of the accountancy watchdog the Financial Reporting Council (FRC), to be completed by the end of the year.
It is a little difficult to consider something to be a ‘radical’ idea when it was first proposed seven years ago, in the immediate shadow of the financial crisis – to no avail. A snapshot of business media headlines cast a light on some of the complexities as well as the powerful forces at work that can prevent truly radical ideas from becoming reality.
Boardrooms all over the world are having to come to grips quickly with the wave of female anger that has been unleashed as women unite to tell their stories of sexual harassment and abuse in the workplace. The #MeToo on Twitter - representing a ‘hands up’ by those who relayed their experience of sexual predators – was fast followed by #TimesUp after Hollywood came together in a bid to exorcise the sexual workplace ethos now associated with Harvey Weinstein.
The UK’s corporate governance watchdog, the Financial Reporting Council (FRC) on December 5th revealed its proposals for a revised Corporate Governance Code and as promised, it is “shorter and sharper.” I covered the release in my blog Board Talk with the headline UK Looks To The Future With New Corporate Governance Code.
The reprieve of KPMG, cleared of misconduct by the audit watchdog the Financial Reporting Council (FRC) in relation to its work for the UK lender HBOS will not go unmarked. It is likely to take its toll in the ongoing battle for public trust in the financial services sector and in those responsible for its regulation.